Volkswagen is onboard with our efforts to localize our auto industry: The Madbouly government and German carmaker Volkswagen will conduct feasibility studies for the establishment of the planned East Port Said Automotive Zone (EPAZ) under an agreement inked between the two sides yesterday, a cabinet statement said yesterday.

What’s VW doing? Volkswagen will provide the General Authority of the Suez Canal Economic Zone (SCZone), the Sovereign Fund of Egypt, and the East Port Said Development Company with technical assistance as they work on the zone’s feasibility study, the statement added, without providing further details of the agreement.

EPAZ? The complex, which could be home to vehicle assemblers and part manufacturerson the banks of the Suez Canal, popped up on our radar in June of this year, but has already attracted a lot of attention from industry insiders. The hub aims to attract global players to East Port Said on the back of proximity to global shipping lanes and better access to African and Middle Eastern markets. A range of incentives will be on offer based upon what the company’s operations add to the local economy and industry, investment size, production volume, and environmental compliance.

How big is this plan? The zone aims to attract investments worth some USD 240 mn and provide around 2.1k direct jobs and 4k indirect jobs as it attracts companies in feeder industries, according to the cabinet statement. African Association of Automobile Manufacturers’ vice president Ahmed Fikry Abdel Wahab told Enterprise earlier in the year that the automotive industry “isn’t just about the factory that assembles vehicles. It’s about all the feeding industries that provide all sorts of components — wiring, harnesses, seats, dashboard glass, interior carpeting, tires, etc.”

Volkwagen wants in on EPAZ because it wants in on the local industry: Volkswagen Group’s Africa head said that the company wants to up its presence in the country and jump on board with efforts to localize the industry under the recently launched Automotive Industry Development Program (AIDP).

A foothold in Egypt gives you access to the African market: The Volkswagen regional boss added that it plans to use Egypt as a regional hub as part of “Volkswagen’s strategy to play a pioneering role in developing the automotive industry in Africa.”

** We dove into all things East Port Said Automotive Zone in an Inside Industry published earlier this year.

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